The Pacific islands ‘tuna cartel’ is boosting jobs by watching fish

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Matthew Dornan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

I met Ali on a flight from Fiji to Funafuti, an atoll in the tiny Pacific island nation of Tuvalu. He was on his way home from Korea, having completed four months as a fisheries observer on a Korean tuna fishing vessel. Sitting across from Ali was another observer, also on his way home. He had been away for longer still (five months), aboard a Spanish vessel staffed by Ecuadorian crew, and was flying back from Kirimati island, part of another tiny Pacific nation, Kiribati.

Ali is one of 50 Tuvaluan fisheries observers whose job it is to monitor the activities of fishing vessels from distant nations such as China, Japan, Korea, the United States, Taiwan, and the European Union. These vessels pay for the privilege of fishing in Tuvalu’s waters. As one of the Parties to the Nauru Agreement – along with Papua New Guinea, Kiribati, the Federated States of Micronesia, the Solomon Islands, the Marshall Islands, Nauru, and Palau – Tuvalu’s licence fees are set as part of the Vessel Day Scheme.

Vessels pay for the days in which they are allowed to fish, with (tradable) days allocated to PNA member countries. Benchmark fees were US$6,000 (A$7660) per day in 2013 (three times higher than in 2009), and have risen to US$8,000 as of 1 January 2015.

Trading in fish

The scheme is controversial in some circles. The Nauru Agreement nations have effectively closed fishing in the “high seas” – the pockets of international waters that lie between member states – by mandating that any vessel that fishes in their national waters must abstain from fishing in the high seas. Given that about 60% of tuna from the western and central Pacific ocean is caught in the exclusive economic zones of PNA members, the majority of vessels abide by the rules.

By flexing its collective muscle, the PNA “tuna cartel” – the source of more than half of the world’s tuna cannery supply – has been able to generate significant benefits for members. Access fees or their equivalent (in benefits from domestic processing or associated “aid”) have been estimated at US$218 million in 2013 and US$91 million in 2009, after the vessel day scheme was introduced, compared with US$60 million in 1999, US$67 million in 2006, and US$71 million in 2007, before the scheme was introduced.

Such revenues are very significant in microstates like Tuvalu. Its fisheries revenue reached an all-time high in 2013 of A$18.2 million, or 55% of domestic revenue. This revenue, which admittedly is unusually high, was greater than the A$11.3 million received as grants from development partners – placing in question the appropriateness of labelling Tuvalu a “MIRAB” economy, dependent on Migration, Remittance, Aid and Bureaucracy.

Jobs and workers

Observation of tuna fisheries efforts is also a key source of employment for Tuvaluans. Fifty observers may not sound like many, but in a country with only 2,000 formal sector workers, that is 2.5% of the workforce. That makes fisheries observation proportionally as significant as the mining industry in Australia.

There is more that PNA members could do to maximise the benefits from tuna. Past efforts to develop domestic processing of tuna were unsuccessful, and with the exception of Papua New Guinea and Solomon Islands, will probably never be viable in such small countries. But there is scope to use Pacific island labour on foreign fishing fleets.

A requirement that vessels using purse seine nets should draw 10% of their crew from PNA member countries has already been agreed in principle by PNA Fisheries Ministers as part of the 2009 Bikenibeu Declaration (this figure would rise to 20% over five years).

However, its implementation has been stalled in the past by opposition from some member countries that lack maritime training institutes where nationals could be trained to work on tuna fishing vessels. Last November, PNA Ministers reiterated their support for the 10% quota, set to come into force next year, which presumably would rise over time, and would also include the option of paying a waiver fee for vessels unable to find local crew. Details on how that scheme will function, include waiver fees, should emerge at the next PNA meeting, which begins this week.

Skills development will clearly be important for maximising the benefit of any local crewing requirements. In Tuvalu’s case, the maritime training institute could offer training appropriate for tuna fisheries, rather than its current focus on freight vessels (employment on which is becoming harder to find, given competition from countries like the Philippines).

It is not difficult to picture a tuna fishing industry with large numbers of Tuvaluans, or I-Kiribati (the people of Kiribati), working on vessels in PNA waters, generating employment opportunities and payments in their respective countries. The Director of Fisheries in Tuvalu recently estimated that a 10% local crewing requirement could lead to employment for 900 Tuvaluans – 45% of the current formal workforce, and 9% of the entire population.

A national resource

Tuna, the only significant economic resource in countries like Tuvalu, would thereby not only provide resource rents (in the form of licence fees) for government, but also significant employment and income earning opportunities for Tuvaluan workers.

Government-paid observers, like Ali, would of course continue to be important. Without them, the government would be unable to verify the fishing activities of foreign vessels. But employment in fisheries for Tuvaluans would not be limited to observers.

The most difficult part of Ali’s job? Communication. Four months on a boat where none of the crew, except the Captain, speaks English (or Tuvaluan), is a long time. When we said our goodbyes, Ali was about to spend two weeks in Tuvalu with his family.

After that, he was to board another foreign vessel, for another four months of watching people catch tuna.